Wednesday, May 06, 2009

Hugo Chavez on the Potomac, 2: A Lawless National Government

As the details of the GM restructuring plan emerged, on Monday, April 27th, Lawrence Kudlow was one of the first to sound the alarm as secured lenders and bond holders were being given a fraction of the amount owed to them under long established bankruptcy law…“What is going on in this country? The government is about to take over GM in a plan that completely screws private bondholders and favors the unions. Get this: The GM bondholders own $27 billion and they're getting 10 percent of the common stock in an expected exchange. And the UAW owns $10 billion of the bonds and they're getting 40 percent of the stock. Huh? Did I miss something here? And Uncle Sam will have a controlling share of the stock with something close to 50 percent ownership. And no bankruptcy judge. So this is a political restructuring run by the White House, not a rule-of-law bankruptcy-court reorganization….Obama's Pinstripe Revolution, Tom Suhadolnik, American Thinker, 5/6/2009

Writer Suhadolnik’s incisive article should not be missed. We have more than the appearance of a dictatorship in Washington. The White House, in its approach to the auto industry and financial bailout, has acted as if there were no constitutional, legal, or regulatory authorities checking its conduct, as if the President were the principal officer of the government of Venezuela. The setting aside of secured creditors and bondholders as nothing but “speculators” is the kind of sentiment one would expect from a street corner bully working for ACORN. “It’s all those rich people did it.” The rich people, the vast proportion of them institutional, not individual, and despite their better judgment, put a lot of trust in contractual agreements with a major U.S. corporation. Now, the White House is casting people as villains who, as Suhadolnik details superbly, are often money managers for nonprofit institutions, hospitals, pension funds, etc., etc., the kinds of institutions that keep America afloat and Americans employed. Read his whole piece. Be informed about the real stakes. Us vs. them is better defined as America vs. an arrogant one-party government and its leader.